Distributed Liability
The geopolitics of knowing the wrong people
The latest Jeffrey Epstein file release has produced a curious geographical pattern. Markets give 35% odds he’s confirmed as an intelligence asset by 2028: foreign or domestic, the distinction matters less than the question of whether he was working for anyone at all.
The theory exists because the alternative explanations are being met with…skepticism. Epstein was, by all accounts, shite at the job he claimed to do. He presented himself as a financier managing billions, but former colleagues and financial analysts who’ve examined his trades describe someone who couldn’t execute basic strategies competently.
The handful of known investments he made were unremarkable. His claimed methods for wealth generation: tax arbitrage, currency trading, or whatever story he was telling that week lack much holding.
The money came from somewhere. His lifestyle required high, sustained access to capital that his documented business activities fail to explain.
The files mention Russia 5,876 times and Putin 1,055 times. Most of these references show Epstein positioning himself as an intermediary who could connect Moscow to Western power brokers. He told people he could arrange meetings with Putin. There’s no evidence any such meeting occurred. But the pattern of behavior, the persistent attempts to insert himself into political networks, the collection of kompromat-style material on associates, the unexplained wealth, reads differently depending on whether you think he was acting alone or with institutional backing.
Markets give 12% odds he was specifically a Russian asset, 22% that Putin was involved in his operation.
The Dossier Center uncovered his close contacts with Sergei Belyakov, former Deputy Minister of Economic Development and FSB Academy graduate. Maria Drokova, former press secretary for Kremlin-backed youth group Nashi, appears 1,627 times in the files, mostly coordinating Epstein’s media contacts.
The Kremlin laughed it off. Spokesman Dmitry Peskov said he was “tempted to make a lot of jokes about that theory” but wouldn’t “waste our time.” Which is roughly what you’d expect whether the theory is nonsense or uncomfortably accurate.
The more interesting question is what he was trying to accomplish with all those connections. The emails show him offering to arrange meetings between people who had no obvious reason to want his help. Modi and Steve Bannon hours after India’s 2019 election. Trump access for various associates. He discussed foreign policy with Indian billionaire Anil Ambani, lobbying heavily for India to embrace Israel as an ally. After Modi’s 2017 visit to Israel, Epstein wrote to someone that “The Indian Prime minister modi took advice.”
Whether he was a spy or just an unusually well-connected criminal with delusions of influence is uncertain/ The no-intelligence-asset scenario requires believing he was simply that good at ingratiating himself with powerful people while being catastrophically bad at the day job he used to explain his presence. It’s possible.
The Appointment
The United Kingdom is discovering that hiring people with interesting Rolodexes carries certain risks.
Peter Mandelson spent decades as Labour’s behind-the-scenes operator, earning the nickname “Prince of Darkness” for his ability to manage difficult situations.
Last December, Prime Minister Keir Starmer appointed him UK ambassador to Washington despite knowing about his friendship with Epstein. Starmer’s logic was pretty straightforward: Mandelson had the contacts, the experience, the ability to work with Trump’s team. Epstein merely….served as a middleman.
The latest file release showed those contacts included roughly $75,000 in payments from Epstein in 2003-2004 and what appears to be advance notice of a 500 billion euro bank bailout in 2010. Police raided two of Mandelson’s properties last week. He’s under criminal investigation for misconduct in public office.
Starmer fired him in September, but the damage was done. This week, his chief of staff Morgan McSweeney resigned Sunday, followed by communications director Tim Allan on Monday. Anas Sarwar, leader of Scottish Labour, called for Starmer’s resignation Monday afternoon. By Monday evening, Starmer faced a packed room of Labour MPs deciding whether to keep him in office.
He survived, but the mechanism of survival tells you everything about British politics in 2026. Starmer held on not because MPs believed in him, but because gilt markets couldn’t handle the alternative.
Parliament rallied behind him to avoid spooking investors, which is perhaps not the strongest foundation for political legitimacy.
Prince Andrew, stripped of his titles and evicted from Royal Lodge after previous Epstein revelations, now faces investigation under the Official Secrets Act for allegedly sharing trade documents with Epstein during his time as UK trade envoy. The files show he forwarded visit reports from trips to Singapore, Hong Kong, and Vietnam, seeking Epstein’s “comments, views or ideas” on investment opportunities.
Traders are still saying that this isn’t devastating for the future of the monarch as a whole, but it’s sparking discussion at the least.
The 2029 election looms over all of this. Markets already priced in elevated uncertainty about whether Labour can hold its majority, but the Mandelson scandal compounds existing pressures. Starmer’s approval ratings were historically low before this crisis.
“Barely Knew the Guy”
Representatives Ro Khanna and Thomas Massie spent two hours at the Department of Justice on Monday reviewing unredacted Epstein files. They found six men whose names had been redacted in the public release with no clear legal justification.
One was Leslie Wexner, the Victoria’s Secret billionaire. The FBI labeled him a “co-conspirator” in a 2019 document. He was never charged. When Khanna and Massie pointed this out, the DOJ unredacted Wexner’s name along with five others: Salvatore Nuara, Zurab Mikeladze, Leonic Leonov, Nicola Caputo, and Sultan Ahmed bin Sulayem (CEO of Dubai Ports World).
The DOJ’s response was that they “just uploaded whatever the FBI sent.” The FBI had already scrubbed the files before sending them to Justice. Seventy to eighty percent of the documents remain redacted even in the “unredacted” version members of Congress can now access.
Commerce Secretary Howard Lutnick is learning that proximity has costs, though apparently not career-ending ones. Last year on a podcast, Lutnick described visiting Epstein’s home in 2005, seeing a massage table, and deciding to “never be in the room with that disgusting person ever again.”
The files show Lutnick sought drinks with Epstein in May 2011. In December 2012, Lutnick visited Epstein’s private island with his wife, four children, and nannies. They had lunch. Both men invested in the same business that month.
Tuesday’s Senate hearing was something to watch. Lutnick told senators he “barely had anything to do with that person.” He acknowledged the 2011 meeting and 2012 island visit but maintained nothing “untoward” happened. When pressed on why he’d take his family to visit someone he’d called disgusting, Lutnick said it was part of a family vacation and they were just stopping by.
Representatives from both parties called for his resignation. The White House said Lutnick “remains a very important member of President Trump’s team” and that “the president fully supports the secretary.”
The Clinton depositions are scheduled for February 26-27, ending six months of resistance to congressional subpoenas. Bill Clinton flew on Epstein’s plane at least 26 times across multiple trips. The files include photos of him with Ghislaine Maxwell and in a hot tub with someone DOJ describes as an Epstein victim.
The Clintons fought the subpoenas for months, claiming they were politically motivated. As contempt proceedings moved forward, they caved. Now they’re demanding public hearings instead of depositions. Hillary Clinton tweeted: “If you want this fight, @RepJamesComer, let’s have it — in public. You love to talk about transparency. There’s nothing more transparent than a public hearing.”
Markets give her 37% odds of getting that televised hearing, along with interest in the spectacle than in whether either Clinton invokes the fifth amendment or executive privilege during testimony.
Prison time in 2026 sits at 6%, which tells you everything about how seriously traders take the prospect of consequences.
As for Trump, Representative Jamie Raskin noted he’s mentioned “more than a million times” in the unredacted files. Markets give low odds he faces charges related to Epstein.
The internet, naturally, focuses on the more important stuff.
There’s a market asking whether Trump and Clinton had sex with each other, currently trading at 1.5%.
“This is bringing down the British government,” Khanna told reporters. “It may bring down the monarchy. What are we doing here in the US to stand up to the Epstein class?”
The files are, after all, about American networks. They document American crimes on American soil. Yet somehow the sharpest consequences are landing elsewhere. Three million pages, mostly about the US, causing crises everywhere else.
Happy Forecasting!
- Above the Fold